One crafts using materials the other only uses magic. To make it short, it keeps the inventory clean to just recycle everything and craft with magic...dont works with lunar pills (except you cheat, edit the save or grind 99999 magic).
There i cant help, never needed potions at all except to gift my sweet mouths ^^ Train more and progress the story until you unlock squad management, then take grimm with you for healing.
Farming? Just make it a daily routine to talk and bond with the girls before leaving the tower. I honestly see more problems in expanding the limit so you dont need to fuck every day just to make space for more affection
And of cause pichi is annoying since there is no way to use the gathered affection at all...it may be for the better (i dont want to see gay scenes) but its still useless.